The sectors are determined by algorithms, as well as artificial intelligence that relies on publicly available data for the companies falling into the different categories. The funds select their holdings from across the different size segments of the U.S. equity markets. The Evolved sectors currently cover 12 markets; beyond the seven targeted by the proposed funds, the list includes energy, industrials, real estate, telecommunications and utilities.

The Evolved sector structure is fairly fluid, according to the prospectus, and one company can fall into multiple sectors. The document notes that the fact that a company can belong to multiple sectors reflects the multidimensional nature of certain companies, and that the sector classifications may evolve over time.

The Evolved funds will invest in companies that have similar drivers to those that have traditionally fallen into their respective sectors. There are only a handful of stand-alone actively managed sector ETFs, and no existing family.